An investigation has been launched against budget Asian airline AirAsia (KLSE:AIRASIA), after it was accused of obtaining its international flying licenses illegally.

Authorities in India confirmed that they were launching the investigation on Wednesday, causing the airline’s share price to fall by 6 percent.

Both AirAsia India, its Malaysian parent company, and the airline’s boss Tony Fernandes are involved, with the offices of AirAsia India searched by police on Tuesday.

Mr Fernandes’s Malaysian firm teamed up with India’s Tata group five years ago to create AirAsia India. Both AirAsia India and its parent company have denied any wrongdoing.

Shuva Mandal, director of AirAsia India, said in a statement:

“Air Asia India Limited refutes any wrong-doing and is co-operating with all regulators and agencies to present the correct facts. In November, 2016 AAIL had initiated criminal charges against its ex-CEO and had also commenced civil proceedings in Bangalore for such irregularities. We hope to bring early resolution to all such issues.”

Shares are currently trading down 7.85 percent at 3.05MYR (0833GMT).